Evolving Process Excellence (Part 4): Is continuous improvement still relevant?

Businesses today need to transform more radically and more often. Why would you want to make small incremental changes to a business model that will be obsolete in six months time? Part 4 of 7 as senior process professionals offer their opinions.

Continuous improvement is the idea that small, incremental changes can add up to big improvements over time. Meanwhile, business transformation typically refers to major changes to way the company operates and even what it does (you need to look no further than the music business for an example of an industry that’s completely had to transform its business and operating models).

But, as this series has been exploring, businesses today need to transform more radically and more often. Does that leave anytime for continuous improvement? Why would you want to make small incremental changes to a business model that will be obsolete in six months time?

In the fourth of a 7 part series on PEXNetwork.com looking at the next generation of process excellence, senior business transformation and quality professionals explore how continuous improvement fits in a world where transformation has become the modus operandi.

Transform or improve? So many decisions!

The following transcript has been excerpted from a roundtable discussion recorded last year. For a full transcript of the debate, download this whitepaper: Quality and Continuous Improvement in an Age of Transformation.

The following transcript has been edited for readability.

Question: Can you conduct continuous improvement & transformation initiatives at the same time?

Estelle Clark, Business Assurance Director at Lloyd’s RegisterI think that there need to be occasions in which you do distinguish between continuous improvement and transformational change. If you’re making a significant transformational change, for instance, I think you ought to freeze continuous improvement and not do it at the time of the change. However, I think we’ve all been in situations where we’ve been told that a transformational change was going to be happening in the next 12, 18, 24 months, and actually, in reality, it’s taken even longer. You can’t afford to hold up continuous improvement for that long, so I do think you need to be continually improving until such a point, in order to keep things up to date and as relevant as possible. There are also the cultural benefits of involving people in change.

But I think you need to be bringing continuous improvement back very soon after some significant change. That’s partly because there’s likely to be things that haven’t actually been implemented in the mainstream of the change (because it’s been trying to deliver to a deadline and there’s stuff that’s just got moved into business as usual) but also because following the change you do make sure that you maximize your investment and you keep the change current by applying continuous improvement as soon as you possibly can.

I would also use continuous improvement in the whole plethora of things that are going on that aren’t part of the transformation. I don’t know any organization that’s transforming absolutely everything. I think if you were changing more than 25 or 30% of stuff that’s going on, you probably need your head examined.

So, the rest of the world and the rest of the people need to have the opportunity to keep everything continually improving. The danger is, of course, that the transformation is thought of as being the sexy place and it’s the only thing that anything gets talked about and the rest of the world is the Cinderella.

Vince Pierce, Senior Vice President Global Business Transformation, Office Depot: Assuming continuous improvement is part of the culture, you would expect that to take place even in the areas that are being transformed. The assumption is that we’re not stopping production in whatever environment you’re in; the work still continues.

If you’ve got a culture of continuous improvement and you’ve got some fundamentals in place people can continue to do work and improve in the context of a process, while things are transforming. Unless the change is being implemented at a particular time in a particular area, people are still doing things. If you have the fundamentals in place - you’re doing daily huddles, for example, or you’re looking at yesterday’s performance and things that got in the way, that need to be removed through a set of countermeasures - I would expect that to continue.

I probably wouldn’t introduce continuous improvement as something new in an area that I’m transforming. Assuming it’s there, though, I wouldn’t want them to stop when we’re off trying to figure out what the changes are. Even if those folks are involved when they go back in running production, I would expect them to be operating those fundamentals.

How we position continuous improvement in our transformation framework here at Office Depot is in the sustain phase, so we ensure that the culture of continuous improvement and the fundamentals that we use to operate it are reinforced at the end of the transformation if they existed before we got there and if not, we’ve got that culture and we’ve go those fundamentals in place, so we can hold the transformed state. Continuous improvement is absolutely a part of it and how much of it we do, during the transformation, depends on the state of the operation being transformed before we got there.

Gregory North, Vice President Lean Six Sigma, Xerox: I would put it slightly differently. If you’re making a major change in a given, space you’ve got to be very careful about introducing new concepts, or even, perhaps, putting some on hold existing ones, to make sure that you allow adequate mind-share to drive the change you’re looking for.

The way we think about it in Xerox now, and the way we talk about it is that in Lean Six Sigma 2.0, we have a pyramid. The pyramid has a foundation or base, which is the culture of the corporation. That’s where we talk about the culture of continuous improvement – innovation – that we want our employees, everyday, to be thinking about ways to lean out and ways to add new value.

Above that level of culture, there are processes that go across the company. We want those to be designed in a robust, lean way, but we want to continuously optimize. That’s where our master black belts and green belts around the world are working to break down functional silos and optimize them and ultimately, improve our game on a month by month, quarter by quarter basis. Then, once again, going up to the capstone of the pyramid, think of it in terms of the cycle of years and strategy versus months.

This is not where projects occur, this is where programs occur, and in that business transformation space, leaders are charting a vision for the future that translates into strategy; that’s where we make investments in people, process and technology, as Vince said earlier.

Ultimately, corporations have sometimes failed when they’ve looked at any one of these as being sufficient. If you do, for example, the transformation thing, but you don’t do the culture of continuous improvement piece, it’s very disempowering. It’s like saying to your employee base, "attention everyone, we’re improving the company; we’ll let you know when we’re finished." That’s not the message, obviously, that corporations want to send.

Similarly, not every change effort has to be a large transformational program. Some things can be done well and quickly. You want to drive that speed with local control and local optimization. From our perspective, what’s exciting about the times we’re in, is that not one of these things becomes less relevant. Continuous improvement is never more important than it is today because it gives every employee in every customer interaction a chance to improve. That’s the rate of change our customers are looking for.